Senior police officers who worked in Scotland Yard's Anti-Corruption Squad on a series of high-profile cases are themselves under investigation after allegations that they manipulated evidence to secure convictions against fellow officers.

The revelation came as a parliamentary delegation of six prominent MPs and a long-standing member of the House of Lords demanded action over the conduct of the Anti-Corruption Group - officially known as CIB and dubbed The Untouchables or The Ghost Squad. In a meeting with John Denham, the Home Office Minister with overall responsibility for the police, Lord Graham of Edmonton and MPs from across the political spectrum, including Labour's Andrew Mackinlay and Conservative Henry Bellingham, demanded an immediate independent inquiry.

Lord Graham, a former Labour Chief Whip, told The Observer that the evidence he had seen pointed to a 'pattern of operation' within CIB3 which he found 'deeply disturbing'. The Home Office last night confirmed that Denham had asked for further information about the cases.

The investigation was instigated by former Detective Constable Jeff May. After 19 years of unblemished service, including a spell working undercover and tackling high-ranking criminals, May was arrested after it was alleged he dealt in heroin and tipped off a drug dealer that her house was to be searched. All the evidence against May came from a drug dealer with a criminal record that ran to five pages and included numerous offences of dishonesty. Letters between this woman and another police informant hint at the pair collaborating to make up elements of the story.

Part of May's complaint is that senior officers on the team were aware of the conspiracy against him and that the principal evidence against him was unreliable, but chose to arrest him anyway. After he had been suspended for eight months the case against him fell apart and he was reinstated to full duty. However, the strain of the investigation left him clinically depressed and he retired on ill health grounds. May is suing the Metropolitan Police for wrongful arrest and false imprisonment.

A spokeswoman for Scotland Yard confirmed that an official complaint was received from May and that an Investigating Officer had been appointed to the case. 'Because the investigation is now under way, we are unable to make any comment at the present time,' she said.

During its preliminary stages, the investigation was dealt with by Commander Andy Hayman, the man who oversaw operations by the Anti-Corruption Squad. He spent five months working on the case and amassed a thick file of evidence before appointing an Investigating Officer. The Observer understands that the initial assessment by that officer is that the case is so serious it should be investigated outside the Met and supervised by the Police Complaints Authority.

May's MP, Liberal Democrat Paul Burstow, who represents Sutton and Cheam, told The Observer: 'This is the tip of the iceberg. Some officers may be corrupt, but they have been put away under false pretences.'

The Anti-Corruption Group includes several divisions of the Complaints Investigation Bureau. CIB2, which has a staff of around 50, is the 'traditional' arm and is responsible for complaints of general misconduct. CIB3, formed in January 1998, is more pro-active and is widely feared. Staffed by more than 180 detectives, it is the largest single detective division within the Met. Its annual budget of £12 million is used to investigate officers suspected of corruption and run integrity tests on random targets. CIB3 has bugged the homes and vehicles of target officers and used police informants and criminals to effectively entrap them. Such techniques caused widespread despair and resentment within the ranks, and the team is credited with helping to reduce the morale of the Met to an all-time low.

'They have been given a carte blanche to go out and do whatever they want when it comes to gathering evidence,' said one suspended officer. 'If we had behaved the way they do and used the same techniques against criminals, we would have been arrested.'

Yet, despite the large number of staff and vast amount of money at its disposal, the Anti-Corruption Group has produced little evidence of its effectiveness. During its first two years only eight officers were convicted. More than 74 were suspended, and some suffered nervous breakdowns as a result. Several attempted to commit suicide.

The delegation of MPs is hoping for an early response from John Denham. Andrew Mackinlay, local MP for John Redgrave who was suspended for six years after a CIB investigation, told The Observer: 'My constituent has been denied due legal process. I am concerned that the tactics used against him by officers from CIB were improper. There needs to be a full independent investigation.'

Mackinlay's previous attempts to raise concerns about CIB3 were shot down last year by the then Home Secretary, Jack Straw, who told the Commons: 'I have seen no evidence whatsoever to justify his criticisms or to justify the establishment of any judicial inquiry. What I do know is that officers who are corrupt are often extremely clever in seeking to disrupt the investigation of that corruption and frequently make great use of their own perverted detective skills in order to do so.'